Winophilia

What’s up with Bordeaux prices?  Some of these 2009s are insane.  Why do the famous names seem to cost 10 or 20 times as much as the rest?

If you have the impression that the price gap between the most famous names and the literally thousands of other Bordeaux châteaux is more extreme than in any other category of wine, you’re right.  Here’s how it happened.

Bordeaux pricing rose in a more or less steady fashion from the mid-’70s to the mid-’80s, largely based on the perceived quality of each new vintage.  The last vintage that came out at what old-timers would consider to be reasonable prices was the 1982s (well, actually the 1983s).  But the heavily hyped and very popular 1982s, which in retrospect were priced too low at the outset, skyrocketed in the secondary market during the second half of the ’80s and through the ’90s, and the American market’s new obsession with Bordeaux quickly put upward pressure on the release prices of new vintages.

To give you an idea of what has happened to the prices of Bordeaux’s “first growths” (e.g., Châteaux Latour, Lafite-Rothschild, Mouton-Rothschild, Haut-Brion and Margaux) over the past generation, I still have receipts for my futures purchases of the 1982s at $400 a case.  Today’s futures prices for those wines from the highly rated 2009 vintage are north of $1,000 a bottle.  But over the same period, prices for the everyday drinking wines of Bordeaux haven’t even kept up with the underlying inflation rate.

Collectors who had been lucky enough to purchase the 1982s at opening prices found their wines appreciating by 1,000% or more—and sometimes much more—by the end of the ’90s.  Big-name Bordeaux had turned into a hot status item for high-rollers in places like New York City, London and Las Vegas and was being widely purchased in large quantities, sometimes as investments, by all manner of cash-rich vulture capitalists.

By the late ’80s the most famous Bordeaux names caught on in Japan, and, more recently, Russia, India and, especially, China have plowed headlong into the Bordeaux game.  As these countries have gained substantially in buying power over the past decade, largely at the expense of traditional Bordeaux markets like England and the U.S., more and more claret has been finding its way to these new markets.  Consumers in these countries tend to be especially status-conscious, so it’s hardly surprising that the strongest buying interest has been in the “brand names,” especially the first growths and a handful of the other most highly rated “collectibles.”  So certain wines have been bid up dramatically in price in recent years while the rest have remained out of the spotlight.

There are other powerful factors behind the quantum leap in prices for the most sought-after Bordeaux.  For example, over the past two decades increasingly quality-conscious properties have cut back, often dramatically, on the number of cases they bottle of their grand vin, declassifying lesser fruit into second and even third labels.  Some first growths that routinely bottled 20,000 cases a year in ripe years during the 1980s may now offer as little as 12,000.  So demand for these wines has grown at a time when supply has contracted.  Moreover, the explosion in the number of wine auctions since the late 1990s has called further attention to the value of brand name Bordeaux as commodity items on an international scale.

These days, the most-in-demand Bordeaux châteaux essentially price their successful vintages to the highest bidder, and these bidders are no longer in the U.S.  The result has been a sharp drop in the quantity of the better wines being shipped here.  When you see the outrageous prices being asked for collectible Bordeaux these days, especially for many 2009 futures, don’t make the mistake of believing that all Bordeaux is priced like rare works of art.  This may not exactly be Holland’s tulip mania of the 1630s, but consider the distinct possibility that today’s record-high prices make these wines very poor investments.

In fact, it’s only a relative handful of the literally thousands of Bordeaux that have been bid up to these levels, despite the fact that they may be made in quantities as large as 15,000 or 20,000 cases per year.  So today, hundreds of properties with little or no cachet are downright cheap compared to cabernet- and merlot-based wines from our own West Coast, and the number of superb values available today to consumers willing to do a bit of due diligence is almost too large to count.  For every wine priced at $200 to $1,000 a bottle, there are literally dozens of satisfying, well-made choices in the $25 and under range, especially in a very ripe and fleshy vintages like ’09. So if you’re a Bordeaux drinker, as opposed to a label fondler, there are more good options available today than ever before.